Business / Economy

China will pursue sustainable growth through reforms

(Xinhua) Updated: 2014-04-12 15:31

WASHINGTON - China would not resort to massive stimulus policies and had potential to keep its growth in proper range, Chinese Vice Finance Minister Zhu Guangyao said on Friday.

"China has the potential to sustain a 7 to 8 percent growth rate in the next 10 years," Zhu told Xinhua after a meeting with finance ministers and central bank governors of the Group of 20 (G20), which was held on the sidelines of the ongoing Spring Meetings of the IMF and the World Bank.

The vice minister said Beijing would not roll out stimulus measures in response to short-term fluctuation, but would instead take a medium- and long-term view of the economic fundamentals and stick to the reform strategy to achieve quality growth.

China will pursue sustainable growth through reforms
Government won't resort to short-term stimulus 
Zhu said the global recovery was still fragile and vulnerabilities built up in recent months. "One of the biggest risks to China's economy is still the spillover effect from the US monetary policy adjustment," he said.

The US Federal Reserve started tapering its bond purchase program at the end of last year, triggering volatility in emerging countries.

The IMF noted in its latest World Economic Outlook that the renewed increase in financial volatility in January this year highlighted challenges posed by the changing external environment to emerging economies.

Zhu said US Fed officials and Chinese officials had been in good coordination in terms of the central bank's policy intention.

The Fed will end the bond buying probably at the end of this year if economy develops as expected. The Fed will launch the first interest rate hike, which will ripple through the world economy, including China.

In response to a question of shadow banking risks, a heated topic on China, Zhu said China's shadow banking system was manageable in scale but its rapid growth brought challenges to financial regulation. China would face the issue and resolve it "in a prudent way," with an aim of avoiding moral hazard and possible systemic shocks.

Zhu also urged the United States to approve the IMF 2010 quota and governance reform package, calling it "a shared commitment of the international community."

Finance ministers and central bank governors of the G20 expressed their "deep disappointment" at the delay of the reform, he said, adding that the reform can never be stemmed, and that the United States should not fall short of meeting its responsibility.

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